FSCS Limit Rises, But Broker Protection Remains Unchanged
• The PRA released its review, increasing the FSCS deposit compensation limit for cash deposits from £85,000 to £120,000 per eligible depositor.
• However, the protection limit remains at £85,000 for investment accounts, including accounts held with retail brokers regulated by the Financial Conduct Authority (FCA).
• The new limit comes into effect on 1 December 2025.
Why it matters
• Although this increase enhances protection for depositors (savers) in banks, it does not increase deposit protection compensation for clients of forex/CFD brokers regulated by the FCA. Therefore, traders dealing with brokers should keep in mind that if brokers become insolvent, their recovery is still limited to £85,000, the same level of deposit protection limit.
• From a broker comparison table perspective (a key area for the WikiLix audience), this reinforces that you want to consider the difference between 'deposit protection' and 'investment compensation' in terms of broker safety and backup support.
• The announcement may cause many brokers and investors to more clearly indicate how clients' funds are segregated or insured above the FSCS limit. The PRA's limit will be considered when making claims while marketing to investors and managing risk to their clients' fund within the UK broker market.
WikiLix Insight
• For the trader: If you trade with a UK broker, despite the headline figure of £120k, consider that fund protection has not improved in your favour, and the fund-neutral limits remain unchanged. Confirm that the brokers' own segregation of their clients' funds and insurance provisions are sufficient above the regulatory minimums.
• For the broker comparison table: This is a timing point - you should indicate "Investor compensation limit - UK (FCA/FSCS): £85k (unchanged and as of 1 December 2025) alongside the PRA announcement as part of the broker's regulatory profile.
• For the regulator risk assessment: While the PRA/FCA framework remains resilient for banks, the unchanged limit with investment accounts may reflect a regulatory calculation around market-risk conditions for trading vs deposits. As a result, brokers may "double down" on their own protections (e.g., insurance wraps, client-fund audits, etc.) rather than relying solely on FSCS coverage.
